tv On the Move Bloomberg December 5, 2013 3:00am-4:01am EST
it has been the first time in a number of years. talk about a deficit. we will see if we have anything that has not been leaked to the market. we have a statement and there is a bit in this statement. joining later with the details. >> we have the forecast from the ecb >> it is higher. do not expect that from the ecb. the rate policy could go and it surprised everyone. is that the ecb has more work to do. >> we have corporate news. >> keep a look on the luxury markets. it could go a little bit higher.
shares and weo .5 see it down. it is more luxurious. it is dependent on europe. and it is in the wholesale market. you let's go to our international correspondent. gaining mobile may be state approval for a new license. that could mean assets and 8 million subscribers. the next month, the iphone is on sale. >> thank you so much. a center and a stamp of
approval from regulators in china. general motors is rolling chevrolet. out andputting a note charges 700 million in to the european companies. it is focusing on this. we will have more on this car sector later today you have the statement and a little bit of luxury. >> it is busy. the market open. let's get a look at these market opens. they open a little bit lower and ,f you are looking at the ftse you are looking at the rally. where is the rally? i do not see it. there are losses. the word is taper. they have speculated this month.
there is a possibility and you see it in the bond markets. the yield on the 10 year is 2.8%. this one is near the highest of the year. it is getting quite better. let us move on though. today the bank of england meets the ecb. they have a little bit more work to do. short the euro and the pound. if you look at the pound, it is down 2.7%. the risk is right here. the ecb has a lot more work to do. they could be talking about everything today. >> thank you so much. these are the very latest. has more on the investment strategy.
let's talk to the chief investment officer. he has 20 billion pounds under million -- 20 billion pounds of assets under management. how do you position yourself ahead of the ecb in 2014? >> ahead of the four -- ahead of the ecb and not the numbers. probably verye nervous and worried about the fact that a strong number from the united states will perhaps cause them to taper in december. there are a lot of jitters around tapering and, at the end of the day. they are going to rain in luxury policy. that means a stronger policy. >> i'm trying to get my head around the extra liquidity because they always prefer bad
news at some point the stimulus will come out of the market. >> i think that, at the end of the day, there is a bit of volatility around the beginning of tapering. people should take the positive. we are very optimistic about the outlook of the short and medium term in the united states. you want to remain invested in it in a number of years -- for a number of years. answer haven't forecast plot -- surprised markets. >> i think that they are very worried about the deflation coming in to the economies across europe. not expect a surprise announcement. there is a talk of bank deposits. it he talks more broadly about the numbers and the market
economies. >> what is the next step? are we going into asset quality reviews? maybe? underestimateer it. he made surprises in the january and february part of the year with his package that does something a bit more than that there is a coalition agreement and i think she will be behind some of the stimulus. >> talk to me about your favorite picks. talk to me about the macro environment. diverse. >> indeed. play.are a macro-
there is growth in china and the it demonstrates some and boost cash flow. the cash flow comes through next year and stronger growth in oil prices. your your go back to unit trust. joined later are in the hour. 2014l ask him about his investment strategy. we'll have more on this story thisf apple can deal with
we heard news this morning. accounts in the electronics business and they gained 52% on the back of that. has is. chancellor autumn statement later today. that is at a time when the u.k. is the best-performing economy. manus cranny is standing by. jonathan ferro joins us. the data is ahead of the chinese statement and it makes the position look good. brand and ittrong is about this recovery and a
triple that recession. andomes on a strong backing there are questions around the housing he will talk about the growth and deficit. there is another measure of austerity. it is not going away and it is about not giving anything away at this junction. >> we had some leaks. will there be any surprises? surprise. whether it is the housing market , where the exemption might come the issues of foreign ownership. something and spell
out property for foreign owners. there is a leak. the housing will be a contentious issue, francine. issueill come in on this on the owner side. that is quite a bit of a long graph. >> yes. it certainly is. let's turn to jonathan ferro. what can we expect today? higher in the ecb is not so bright because they have one percent growth in the next year. they are below the target. they have a projection and you could see it a long way off.
it matters. there's an opportunity to gauge the policy at the ecb. there is forward guidance and baby steps. there was an extended time. how long was that? it is an extended time. >> there is the prospect of deflation. is that justified? in october, inflation was below the level of japan. and thatthat in japan is when the comparisons took off. this goingissue of at a slower pace. you have greece, cyprus, and, i nylund. you have prices as a big problem. if i can buy an item cheaper, where would i go today? the problem is tomorrow. this is the underlying problem.
you have france and the recession. and and the direct whether the ecb will go today. there is more to do. >> thank you for all of that. starts at 11:15 a.m. there'll be a rate decision and we will be watching the european central bank later on. the next decision will be at the press conference live. with us is the chief investment officer. thank you for sticking around. you talked about the macro view. how concerned are you about this in europe? >> it is a concern. rather quickly, there is a struggle into its and if we get weconomy moving forward,
need to get inflation into the system and we have to do that sharply. we have growth and europe is going to be out there. for our economy, we need stronger growth. >> are you concerned about asset bubbles? yes? you talk about bitcoin and i know you referred to it as a bubble. it looks and feels like a bubble to me. there's concern about whether there has been manipulation of the unit and whether people are using that to their advantage. >> it is knows a prize that china banned bitcoin transactions. them.lk to
wpp is a macro play and based on asia. it is an early investor in early mover. it gets onto the chinese have ac economy and they very good job. >> it is a different company. u.k.ey are known for the and they have been early movers in the online gaming and converting business online. prices are going up as a result of football games. as you know, they'll is make a a balancehey may have
downwards on bad weather. >> that is for sure. >> this is interesting. >> talk to me about the top electronicsd getting to 52%. this is a company that is getting chemicals and industries. story? is in a -- is it acal story? pharmaceutical story? chemicals the going to flat screens and things like that. have made top-quality markets. view that tablets are
a growth area. strong and there is a private equity counter. they may look again at a counter bid. they paid a price for it. known and they have a use electronics. is the recovery, for instance and we have been buying in the u.k. tech sector. what is related to tech is something that they have an edge on. we think is an interesting weapon. i think it's fair to say that there are opportunities.
>> here are companies on the move. market share funds by one percent. they will boost aircrafts flying out of germany. they rushed to establish their own system. record $300a million lost in 18 months. they tend to make market share. china mobile has tech giants and that is according to wall street journal.
they supported investors and pushing forebrities expansions. the director kwai. caroline hyde joins us. loved by the prime minister. they had the g8 group. they came over in june. mess and that was up two percent. not as much as expected. companies invested. they are starting out. they look very british. they want half of the bag made in the united kingdom. sales, this is department stores. >> at the same time, they have to do without one. >> september was the last one.
they have to pass on the new one he was not given the credit for the growth of the last six years. is a large range. there are concerns with the chief executive back in 2012. there are plenty of people and we have not got a massive hole. the fact that sales are falling, they will push ahead with the expansion. is trying to make it a more natural. a twisted to the united states and asia. >> 80% of the sales in the economy.
stores, 15ned up the was the target for the fiscal year. sales are going up. barclays is saying that they have the domestic brand and the analysts paid 15%. board and you have to stick with it. up back in may. and it has5 pounds been a rocky road. many chief executive has. >> that is the latest. sachs and then 2014 investment strategy. we had the statements and this is after the break. he. right here.
>> welcome back. in a bloomberg cause european headquarters in london. the wall street journal, there will be scriber's with access for the first time. hans nichols joins us for more on that story. it is huge. >> to put it into perspective, the size of the market is seven times bigger than verizon and is
the largest provider in the united states. they say that they will wait until they have 4g to sell the iphone. they got the commercial license for the network and the walls three journal is reporting that it will go on sale in time for the christmas holiday and that 1.5d mean an additional million a year and it is 25 million more a year. it will be the technology that promotes faster downloads. it will give you a network inside of china. there are two trips to china this year. and you look at the revenue the potential of selling the rep -- the potential of selling it, you will see why.
it is 13% and, in terms of revenue, it represents a massive market for apple and it looks like it has cleared a regulatory hurdle. >> he has been busy. what is the latest on the calls to boost the stock buyback? >> he is: for a buyback and he is pushing for a shareholder vote. , you cannotting have a vote on this. we have him dialing back to demands. he is lowering that a little bit. some reports say this 50 billion. he is also disclosing his size of state and be .5% of apple is what carl icon has.
it is nonbinding and that is a crucial distinction. for -- toorce apple put out more money. they will unload from their books. >> thank you for that update. these are the top headlines. the bank of england is seeking an exemption from a stress test. herell conduct an example and convince regulators that the tests will carry out. going biggest banks are to surrender bonuses. six banks will take the billions of euros in interest rates. sanctions to $6 billion. the bank of china has banned institutions from doing
transactions in bitcoins. alan greenspan said the bitcoin prices out -- are unsustainably >> we need to the drought what the intrinsic value of the coin is. >> is this a bubble? it yes. >> joining with trade recommendations is francisco. market research at goldman sachs. great to have you. talk to me about the decisions at the european central bank. they influence your topics for 2014. >> inflation is the centerpiece for deliberations.
the trend has been lower and that the scary part is and the are declining bigger picture is one of progress and removing inflation in the area they cannot compensate for what is happening in france and italy. that will set the tone for the interest decisions and rates will be low for longer. >> do think there is extra stimulus? stimulus totra combat the inflation. >> a continues to play a big role in their discussion and is stronger. it is the case that the eurozone
is a relatively closed economic area with a lot of inflow from overseas. people are trying to rebalance their portfolios and not put pressure on the euro. everything that goes in the direction of this can be read as a fiscal expansion. that drives the currency up and they will think about the euro. they will wait to see what the fed does to the dollar. are expecting a federal taper in 2014. what does that mean for the team? they are positive. >> the idea is that the united andes fed will let go manage that directly. they have different successes, as you know. we had a low interest rate and it went back up. the strategy is turning towards
keeping the structures aligned to where they think it should be . that is a concept that depends on the economy and they are trying to do that by maneuvering the front end of the curve. this guidance concept is something that they are likely to strengthen as they taper. it to accelerate more than three percent. how would you play with currencies? >> the currency puts the aussie- dollar against the u.s. dollar. we will have a gradual differential in real rates going on and we think that the central bank will find itself needing to cut rates more. the mining cycle will turnover and it will not compensate enough for other parts of demand
and exports. that is the main proposition. they have been talking about it being too strong. >> it is difficult to disagree. >> that is how we think they will engineer. a use that as a henge for long essay and p position. we are positive on development in equities. >> what you think is the more controversial call? thinks the one where you you have to think about it a ?ittle bit more than the others >> i would say there are two. lookinground an idea of and we have come to a low volatility -- volatility environment. we know why that is the case. the economy is stronger and improving. loweringhy people are
the forecasts. a lot people are saying the same things and the volatility is down. the central banks are in the markets aggressively. whether or not that will last all of 2014 is a question. months?or the first six >> more likely than not. the economy will pick up stream -- steam and volatility is something that people are starting to think about whether or not that is appropriate. >> we will take a short break and continue our conversation with the head of markets research. manus cranny will give us an update in two minutes.
phone. francisco who is the head at goldman sachs. we're talking about 2014 and the terms. you talked about the trades. the second one that you are saying is in u.s. treasuries. >> we are recommending it to be short against european curves. the content is part of that is the federal reserve. if you look at the cross-section of interest rates, they are not where they should be, in relation to the macro factors. there is one part of the curve that is manipulated by the federal reserve. and ratesfinances from zero percent to three percent. they are flat. the reason that is the case is because they have told us that they will apply forward guidance
and people have an expectation that forward guidance will be strengthened and that is our expectation. theeans setting rates and forwards. be points on the yield curve are distorted. -- relative to historical norms. that is the contentious part. will they let go of to mark that is the tug-of-war. >> talk about the united kingdom's economy. like they are firing on all cylinders. the markets are still concerned about a possible pullback and not going as strongly as we thought. >> i think the markets react to data and there is a economy that has thrown the kitchen sink at the roads and it finally came through. people were worried and things
started to turn. there was a backlog and the confidence boost, given the forecast in the change of strategy. the main ingredients for growth at we are seeing come from london and have spurred credit creation. thendly, factors pertain to confidence any stabilization. able to not ask us a lot about what is happening there. that is a change that is about scotland. the third thing is more structural and it is the labor market that has operated in a strange way. it is a more continental way. there have been economic circumstances. that means that more people keep the job. stable and gross.
there is consumption they get the economy going again. there is a combination of forces. the market is not excessive. is taking the view that there may be the first tight in the cycle and that is ahead of the fed. it is interesting. so, thethat, rightly rates will be lower than the u.s.. if you look, historically, they will be very different. microstill have macro and research. 15 minutes from now, we have guy johnson. you have carmakers. >> yes. you have it coming into europe and the car is new. the status symbol that goes with it certainly is not.
there is the car sector and a little bit of detail. ande is macro today standing that is delivered by the british chancellor. it is likely to be a statement that focuses on the ability to pay bills and making that easier. this is the politics theme that runs through everything. the bank of england will be interesting and make a statement . projections.tock what will they tell us about moving forward amir. the credit growth in the euro zone is looking bleak at the moment. if you look at the demands of the ecb, a should do something. many would argue that. will we get more from mario draghi? outlook may have some downgrades coming through from the ecb. there's plenty to talk about.
>> guy johnson has the pulse in 20 minutes. let's go back to manus cranny. indeed. we have jonathan with me and he is the director at the national institute of economic and social research. it is great to have you with us this morning. growths the upgrade to for the first time in a wild. that three years ago, they had growth that told at seven percent and the plan was eliminated. >> we are nowhere near that. what happened? bad there is a
mixture of bad policy. >> are you happy with what you are seeing coming? in the short-term, we have a recovery. that is good news. we should be pleased about that. at the moment, there is consumer spending and, while, in the , any recovery is better than nothing. we still have to worry about the long-term. >> i'm concerned about the gimmicks that are going on in the politicking of parliament. inre is a sound position terms of that, are they always tinkering? >> absolutely. the labour party is capping energy bills. the government has its own
ridiculous gimmicks. i'll of this is bad for energy policy. it is a long-term regulatory framework that favors companies. we are not giving -- we're not getting that and, instead, we are getting more gimmicks. this is not what the country needs in the medium and long- term. we need energy policy and housing policy. but you would like to see that canceled. >> i would. suffered aonomy has serious problem with housing .rices they have been too unstable. and it ismore houses not be schemes that have an impact of pushing up prices. >> will have to leave it there. back to you in the studio.
>> welcome back. has andcentral bank financial institutions from handling bitcoin transactions. currencyot think the has a real meaning and a legal status as a currency. we spoke to alan greenspan and he said that the currency doesn't make sense to him. >> this move by the central banks comes after two fraud cases where suspects were taken into custody. we have a chinese central bank that is warning financial institutions. they say to individuals that it is fine to get involved in, but banks cannot get involved in it. they cannot buy or sell bitcoins or insurer bitcoin products.
it is a currency with real meaning and is a virtual commodity. it does not have the same status. the german police here arrested two suspects in a fraud for illegally generating bitcoins. paying talked about greenspan.ith he says it is a bubble and he does not see any value. it seems to the next moves will come from regulators from the states and elsewhere. regulators may be forced or feel that they needed to clamp down. >> even regulators are divided on the legal status. we are expecting rules. they are not agreeing.
>> you see a lot of information gathering. there is a committee that looks at what a bitcoin is and how it is created. central banks, because they regulate banking institutions and financial institutions in their own country, to have more authority. since it is so global, you see central banks clamping down and that has a spillover affect. it could affect global markets. tore is an opportunity regulate it. >> thank you so much. stay with bloomberg tv. we are back with the pulse. we'll talk about bitcoins and carmakers. forward andg a plan look at strategies in europe. we will look at the macro news